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Monday, August 9, 2010

Arbitrator Richard Bloch has ruled in the NHL's favor and upheld the league's rejection of Ilya Kovalchuk's 17-year, $102 million contract with the Devils.

Bloch ruled today that the NHL was justified in rejecting the 17-year, $102 million contract Kovalchuk signed with the Devils on July 19 as a circumvention of the salary cap and the collective bargaining agreement. Bloch’s decision, which came after a two-day grievance hearing last week in Boston, makes the 27-year-old left wing an unrestricted free agent again.

“We want to thank arbitrator Bloch for his prompt resolution of a complex issue,” NHL Deputy Commissioner Bill Daly said in a statement. “His ruling is consistent with the League's view of the manner in which the Collective Bargaining Agreement should deal with contracts that circumvent the Salary Cap."

The NHL Players' Association also released a statement through spokesperson, Jonathan Weatherdon.

"The NHLPA is disappointed with the Arbitrator’s ruling to uphold the NHL’s rejection of the contract between the New Jersey Devils and Ilya Kovalchuk," the statement read. "The NHLPA is currently reviewing the decision and will have no further comment at this time.”

Devils general manager Lou Lamoriello, owner Jeff Vanderbeek and Kovalchuk's agent, Jay Grossman, have yet to return telephone messages I left for them.

Kovalchuk returned to Russia after the hearing and is unavailable for comment.

Bloch's decision means Kovalchuk is free to sign with any team. The Los Angeles Kings, who held extensive talks with Kovalchuk before he signed with the Devils, reportedly are still interested. SKA St. Petersburg of Russia’s Kontinental Hockey League also has made it clear that it still wants Kovalchuk.

The Devils can try to negotiate another contract with Kovalchuk that the NHL would approve, but that would involve a less favorable salary cap hit for the Devils or less money for Kovalchuk – or both.

Kovalchuk’s rejected contact would have paid him $95 million over the first 10 seasons and just $550,000 for each of the last five seasons. Kovalchuk would be 44 when the contract, which would have been the longest in league history, expired. The NHL argued that neither the Devils nor Kovalchuk intended for the two-time 52-goal scorer to still be playing in the final years of the deal and that they were added to lower the salary cap hit.

In its grievance, the NHL Players' Association argued that the NHL did not reject similarly structured deals in the past.

Bloch agreed with the NHL. According to Sportsnet in Canada, in Bloch's ruling, he wrote "this is a retirement contract" and the deal goes "well beyond typical retirement age for NHL players."

Under Article 26.13c of the CBA, the Devils can be fined up to $5 million and have salary cap space and draft picks taken away for being found guilty of circumvention. Kovalchuk can be fined up to $1 million.

A source said today the NHL has yet to make decision on any supplemental penalties for the Devils and Kovalchuk, but, at this point, it doesn't appear it intends to implement any.

The decision was a huge victory for the NHL, which appears intent on trying to exclude front-loaded, long-term contracts similar to Kovalchuk’s in the next round of CBA negotiations in two years.

The Devils acquired Kovalchuk in a Feb. 4 trade with Atlanta, in which they sent defenseman Johnny Oduya, right wing Niclas Bergfors, prospect Patrice Cormier and their 2010 first-round pick to the Thrashers. The Devils also picked up defenseman Anssi Salmela in the trade.

Kovalchuk became an unrestricted free agent on July 1. After an extended pursuit in which the Devils and the Kings were the only NHL teams that publicly showed interest, Kovalchuk re-signed with the Devils on July 19.

Even before Kovalchuk agreed to return to New Jersey, the NHL had warned the Devils that it would reject the contract after somehow getting wind of some details of their offer, a source said. On the evening of July 19, the NHL repeated to the Devils its intention to reject the deal.

The Devils defiantly held a July 20 news conference at Prudential Center to announce the signing anyway. They received the NHL’s official rejection letter a few hours after the news conference.

The NHL Players’ Association filed a grievance on Kovalchuk’s behalf on July 26. After the sides hired Bloch to hear the case as the system arbitrator, last week’s hearing was scheduled.

About

TOM GULITTI has covered the New Jersey Devils for The Record since 2002. Prior to that, he covered the New York Rangers for four years. Gulitti joined The Record in 1998 after six years at The North Jersey Herald News. He graduated from Binghamton University in 1991 with a Bachelor of Arts in Rhetoric-Literature.